A proposed record boost in the state’s main post-secondary financial aid program is drawing criticism from student leaders at Minnesota state colleges and universities, who say they wouldn’t get their fair share of the increase.

Gov. Mark Dayton is asking for an $80 million increase over the next two years in the State Grant program, which officials from the Office of Higher Education say is the largest increase since the program’s inception. Past increases have been half that at most – and flat for much of the past decade.

The problem is not with the increase itself, say representatives of students in the Minnesota State Colleges and Universities (MnSCU) system, but with accompanying changes to the allocation formula.

Students at the University of Minnesota and private colleges would get 76 percent of the increase, according to data from the Office of Higher Education. Students at the less-expensive MnSCU schools would get 13 percent of the appropriation. The rest would go to students at for-profit colleges.

“The $80 million is a great investment, and we’re really excited about that,” said Jonathan Bohn, director of government relations for the Minnesota State University Student Association. “But the way that $80 million will be divvied up is just simply not fair. “

State officials say the State Grant program is designed to give low-income students the chance to choose where they go to school — public or private — regardless of cost. The program has neglected those going to the U and private colleges, they say, and so needs to catch up.

Dayton wants to increase by about $3,000 the maximum amount of tuition and fees that the State Grant covers – from $10,488 to $13,526. That’s far above the average annual increases of a few hundred dollars.

Such a move would benefit private-college students and those at the U more. That’s because their tuition bills are higher than those at MnSCU schools. MnSCU students already pay less than the maximum amount covered by the State Grant, so they don’t benefit as much.

Under Dayton’s proposal, the average annual State Grant for a student at a MnSCU two-year college would go up $66, according to Office of Higher Education data. The average MnSCU university student would see an increase of half that amount. In contrast, U of M State Grant recipients would see their awards go up an average of $953, and those attending nonprofit private colleges would see a boost of $945. Students at for-profit colleges would see their grants go up $240.

It works like this:

Under the current system, the State Grant program pays a maximum of $10,488 for students attending any four-year university, whether it’s public or private.

In practice, the grant never pays that entire amount. Instead, in calculating how much of that $10,488 it will cover, the state considers factors such as family income, how many credits the students are taking, and whether students are independent.

It then determines how much of the cost the State Grant will cover, and how much the students and their families have to cover.

Tuition and fees at MnSCU schools have traditionally been lower than those maximums. So every time tuition has increased, students have received an increase in their grant, according to that calculated split.

[module align=”right” width=”half” type=”pull-quote”]“By not recognizing the full tuition and fees at the University of Minnesota, we are undermining the entire program,” Fergus said, “because we are essentially not being successful at our No. 1 priority, which is choice for financially disadvantaged persons.”[/module]

Not so at the University of Minnesota. In 2008, the U’s tuition and fees began to exceed the state maximum, which at the time was $9,438. Since then, the State Grant increases haven’t kept up with the U’s rising tuition. Now the U’s tuition and fees of $13,526 are more than $3,000 above the current maximum of $10,488.

Tuition and fees at the state’s private colleges, which are about $34,000, on average, have always been over the State Grant maximum. State Grant increases have not kept up with their tuition increases, either.

Office of Higher Education analyst Meredith Fergus says the State Grant has spent tens of millions of dollars over the past few years paying for MnSCU tuition increases without doing much for students at the other colleges.

She says the governor’s proposal tries to restore balance to the system by giving those students more money to pursue the college of their choice. Students, she said, know best what college they should go to.

“By not recognizing the full tuition and fees at the University of Minnesota, we are undermining the entire program,” Fergus said, “because we are essentially not being successful at our No. 1 priority, which is choice for financially disadvantaged persons.”

MnSCU student leaders see things differently. They say the State Grant formula discriminates against part-time students who work because it doesn’t give them aid proportional to the number of credits they take. This session, student leaders have been pushing for more.

MnSCU has also suggested in its budget request to the Legislature that Minnesota change the way it calculates how much State Grant money to give each student.

Bohn said, “We thought there was enough investment (by the governor) to both raise the (maximum coverage of tuition and fees) to a reasonable level and change the formula to help working part-time students.”

In contrast to the governor’s proposal, the Senate and House bills funnel more of the increase to MnSCU students. But the House has allocated a much smaller amount to the State Grant — $11 million — preferring instead to spend money to help MnSCU and the U freeze tuition for two years.

Rep. Gene Pelowski (DFL-Winona) told reporters on Monday:

“(Lower) tuition helps everyone. Everyone in this state is helped by lower tuition. The best type of grant program is in tuition. If we’re going to raise tuition and then selectively spend more to help a few in the grant program, we’re feeding an animal that is insatiable. And that animal has literally brought higher education to its knees in this state. … The grant program helps a few. (Lower) tuition helps everyone. I think it’s time to help everyone.”

The state treats two-year colleges and programs a bit differently. They’re much less expensive, and the maximum tuition and fees that the state will cover is lower — $5,808. Next year, Dakota County Technical College is expected to charge more than that maximum — $5,865 next year, and $6,040 after that. The governor has proposed increases in the cap to cover that.

About the blogger

Alex Friedrich reports on higher education issues for MPR News. Among the stories he has covered: the fall of the Berlin Wall, aftermath of Hurricane Katrina, collapse of the I-35W bridge in Minneapolis, 2003 Moscow suicide bombing and 2004 presidential elections in the Republic of Georgia. He holds a bachelor’s degree in journalism from the University of Georgia and a master’s in European political economy from the London School of Economics.